In Siding and Insulation Co. v. Alco Vending, Inc., 2016 WL 2620507, at *4-5 (C.A.6 (Ohio),2016), the Court of Appeals for the Sixth Circuit held that the FCC’s 2006 amended definition of “sender” did not apply retroactively to faxes sent in 2005. More importantly, however, the Court of Appeals found that common law agency principles did not govern the concept of vicarious liability. Rather, liability attached to those ‘on whose behalf’ the faxes were sent.
Alco maintains that the only way it can be held liable in this case is under a theory of vicarious liability based on a federal common-law agency relationship between Alco and B2B. Under this standard, Alco contends that it is liable for B2B’s broadcasts of the faxes only if Alco (1) granted B2B actual authority to send the faxes, (2) clothed B2B with apparent authority to send the faxes, or (3) subsequently ratified B2B’s previously unauthorized sending of the faxes. . .On the other hand, the Seventh Circuit very recently addressed the vicarious-liability issue in Bridgeview Health Care Center, Ltd. v. Clark, No. 816 F.3d 935 (7th Cir.2016). The court in that case considered who qualifies as a “sender” of an unauthorized fax and concluded that “agency rules are properly applied to determine whether an action is done ‘on behalf’ of a principal.” Id. at 938. Alco now urges us to adopt this approach and likewise apply the principles of federal common-law agency to determine whether Alco is liable for B2B’s actions. We note, however, that the Seventh Circuit’s decision to apply agency law is unsupported by any analysis. See id. This is particularly perplexing because the FCC plainly knows how to impose the standards of agency law when it wishes to do so. . . We must therefore look to the FCC’s standard for imposing liability that was in force at the time that B2B broadcast the faxes at issue. As we explain below, that standard was the “on-whose-behalf” standard. . .The “on-whose-behalf” standard thus exists as a middle ground between strict liability and vicarious liability. This means that a plaintiff alleging a violation of 47 U.S.C. § 227(b)(1)(C) on the basis of a fax transmitted between the time of the 1995 Order and August 1, 2006 must do more than simply show that the defendant’s goods or services were advertised in the offending fax, but need not establish a complete agency relationship between the defendant and the fax broadcaster. See Cin–Q Auto., 2014 WL 7224943, at *7 (“ ‘[O]n whose behalf’ is a standard lying somewhere in the middle—more forgiving than a blanket application of per se liability but somewhat more stringent than vicarious liability through common law agency.”). To decide whether one entity (such as B2B in this case) broadcast a potentially unauthorized fax “on behalf of” another entity (such as Alco in this case), courts have considered a variety of factors. These factors include the degree of control that the latter entity exercised over the preparation of the faxes, whether the latter entity approved the final content of the faxes as broadcast, and the nature and terms of the contractual relationship between the fax broadcaster and the latter entity. See Palm Beach Golf Ctr., 781 F.3d at 1258 (discussing the evidence that precluded summary judgment on facts similar to those in the present case). . Based on the foregoing, a remand is required for the district court to apply the correct legal standard. The court in doing so may allow further discovery to determine whether, under that standard, a genuine dispute regarding any material fact exists, and the court may in any event conduct such further proceedings as it determines is necessary to effectuate the standard described above. In addition, the court should reconsider whether, after conducting such proceedings, Siding’s motion for class certification remains moot.